Guest Contribution: ” Does monetary policy respond to temperature shocks?”

Today, we are pleased to present a guest contribution written by Filippo Natoli of the Directorate General for Economics, Statistics and Research of the Bank of Italy. The views presented in this note represent those of the author and not necessarily reflect those of the Bank of Italy.


Central banks are debating on how best to make their contribution to the global fight against climate change. I offer insights on how US monetary policy responded to unfavorable economic shocks coming from temperature fluctuations during the last 50 years.

 Climatologists and economists all agree: climate change is a threat for future economic performance. The literature has indeed shown that, in recent decades, rising and volatile temperatures had significantly affected countries’ GDP. Although there are significant differences across economies as described in this Econbrowser post, advanced countries like the United States are no exception.

This poses challenges for policymakers. Though monetary authorities are not as central as governments in fighting climate change, there is a lively discussion on what central banks can do using their policy toolkit for mitigating its economic effects. However, the extent to which the conduct of monetary policy might itself be affected by the ongoing climatic trends is still unclear. This lack of evidence rests on the fact that the joint effects of temperature fluctuations on economic output and consumer prices, as well as the correct monetary policy response, are an open issue. Extreme temperatures can have supply-side effects – e.g., by decreasing labor productivity – and demand-side ones – e.g., via rising energy expenses for households and firms – so it is not clear a priori whether and how monetary policy should respond to temperature shocks.

I take up this issue by quantifying the impact of temperature oscillations on the US economy.  I study how consumption, investment, and ultimately GDP are affected, how the CPI index responds and, in turn, how these effects propagate to short and long-term interest rates on government bonds.

For this purpose, I propose a new way to identify unpredictable changes in temperatures that fit with the notion of a shock in macroeconomics. Using average daily temperatures for each US county since the 1970s, I compute quarterly county-level “surprises” as the difference between the number of very high and low temperature days within the quarter and those observed on average during the same quarter of the past five years. The underlying idea is that agents learn about the distribution of temperatures and, based on what they experienced in the recent past, form their beliefs on the highest and lowest temperatures to expect in current season, with these beliefs being updated every year. County-level surprises are aggregated to obtain a US-wide “temperature shock”. By focusing on the size of the shock and by identifying exogenous variations with respect to the most recent temperature data, my approach stresses the idea that, by surprising agents, exceptionally hot and cold weather is what matters in the short run. It therefore overcomes flaws of other methods proposed in the literature based on positive vs. negative temperature variations – which can potentially mix good and bad economic shocks – and fixed-effects panel estimates – where temperature variations with respect to long-run averages can be predictable, as climate change continuously increases the incidence of temperature extremes over time.

Figure 1 displays the incidence of surprises by county (panel a) and the evolution over time of the US-wide temperature shocks (panel b). The first picture reveals that, between 1975 and 2019, surprises have been largest in southern counties; the second one shows that, at the national level, adjustments in the shape of the temperature distribution have been greatest – inducing bigger shocks – in the early part of the sample than in recent times. This does not imply that temperature fluctuations have reduced in size, but simply that extreme temperatures have become more the normality in recent times, so they are somewhat less surprising than in the past.

Figure 1 – County-level temperature surprises and US-wide temperature shocks

Source: Natoli, F. “Temperature surprise shocks”, MPRA Working paper n. 112568, March 2022. [Latest version here]

I then use the constructed US-wide shocks to study the response of key economic variables using local projections. Panel (a) of Figure 2 shows the result for GDP and the consumer price index: while the negative impact on economic activity is significant, that on the CPI index is more muted, suggesting that demand- and supply-side effects may balance out on average. The shock induces a significant reaction by the Federal Reserve, displayed in Panel (b): in line with the response of GDP, some months after the shock the Fed’s economic nowcast (produced within the set of Greenbook Forecasts) is revised down due to the shock. This induces an expansionary monetary policy reaction, as short rates fall at the same horizon. While the behavior of short rates is not by itself guarantee that the Federal Reserve correctly identified the source of the downturn, some evidence points to an increase in the Fed’s attention to temperature fluctuations right after the shock. Indeed, the occurrence of temperature-related wording in the transcripts of each FOMC meeting slightly increases after adverse temperature shocks (last picture of panel b).

Figure 2 – Response to adverse temperature shocks

Source: Natoli, F. “Temperature surprise shocks”, MPRA Working paper n. 112568, March 2022. [Latest version here]

All in all, these findings suggest that climate-related shocks have concurred to determine the conduct of US monetary policy during the last 50 years, adding another piece of evidence to the debate on the role central banks can play to counteract the economic effects of climate change.


This post written by Filippo Natoli.

95 thoughts on “Guest Contribution: ” Does monetary policy respond to temperature shocks?”

  1. Moses Herzog

    I don’t know about monetary policy but my brain sure does. My brain does not function well when it’s hot. I don’t know what it is. But it gets hot in my state, we’re in the regular low 90s now and will probably be hitting triple figure by the end of the week. And I am not joking, every summer I find myself making errors that I don’t make any other time of the year. The summer is BY FAR my least favorite time of year. I detest it. And buying meat at the grocers?? You gotta be on triple vigilance. There’s only one thing I like about the summer, well maybe two. Baseball and women’s clothing.

    Reply
  2. ltr

    https://english.news.cn/20220619/7e5074fe360d41cd974546065a171d47/c.html

    June 19, 2022

    China’s green bond issuance logs rapid growth

    BEIJING — China’s green bond issuance saw robust growth this year amid the country’s push to reduce carbon emissions and advance green development, according to industry data.

    As of June 9, the country had issued green bonds worth 361.56 billion yuan (54.03 billion U.S. dollars) in 2022, jumping 73.72 percent over the previous year, data from financial information provider Tonghuashun shows.

    By the end of 2020, the value of China’s outstanding green bonds hit 813.2 billion yuan, the second highest in the world.

    China’s green bond market has registered strong expansion in recent years, says a research report from the China International Capital Corporation, noting that 611 billion yuan of green bonds were issued last year.

    At present, the funds raised through green bonds are widely used in green development projects in such fields as clean energy, green transportation, pollution prevention and control and climate change response, said Zhang Lichao with Guosen Securities.

    Reply
    1. ltr

      https://english.news.cn/20220609/5501264474d1425885d3c3801ee51e12/c.html

      June 9, 2022

      AIIB issues 1.5 bln yuan of panda bonds in China

      BEIJING — The Asian Infrastructure Investment Bank (AIIB) has issued 1.5 billion yuan (about 225.11 million U.S. dollars) worth of panda bonds in China’s interbank bond market.

      They are the first sustainable development bonds that have been issued by an international institution in China. The National Association of Financial Market Institutional Investors approved launching sustainable development bonds in 2021.

      The issuance has a maturity of three years with a coupon rate of 2.4 percent, which aims to raise funds to support the construction of sustainable development infrastructure.

      The AIIB launched its first batch of panda bonds in 2020, raising 3 billion yuan.

      Amid tight liquidity and rising financing costs in global markets, the issuance of panda bonds at a relatively low rate demonstrates recognition by market investors for the AIIB’s AAA international credit rating, sound financial situation and high-standard operation and management, analysts said.

      Panda bonds are yuan-denominated debts sold by overseas issuers in China.

      Reply
  3. CoRev

    Filippo and/or Menzie, the opening sentence mixes terms that are not equal: “The question of how climate change affects the economy through temperature fluctuations is high on the economic research agenda, as the identification of exogenous weather shocks is still an open issue.” Weather shock, or in this paper’s case temperature shocks, are individual events. Climate is an average of these individual events. They are not the same.

    I commend Filippo for defining temperature shocks. In weather terms they are heat and cold waves. Thank you.

    This comment also surprised me: “Temperature surprise shocks in the US have been a balanced mix of heat and cold surprises and reduced in size in recent times.” Does reduced in size mean that Climate Crises are diminishing? There are papers saying so on several of the natural disaster fronts.

    Reply
    1. pgl

      Me thinks you should read his opening sentences:

      Climatologists and economists all agree: climate change is a threat for future economic performance. The literature has indeed shown that, in recent decades, rising and volatile temperatures had significantly affected countries’ GDP.

      I get it – you like to pretend temperatures are only volatile but not rising. Of course you know this is incorrect. Then again you do not have the integrity to ever admit that rising temperatures are the threat for future economic performance he discusses. So go right ahead and cherry pick what you like and nit pick at what you do not like. It is what you do.

      Reply
    2. pgl

      I guess CoRev did not even finish the 1st paragraph of the paper which reads:

      Another reason is that, as global warming affects not only temperature trends but also temperature volatility, it continuously increases the incidence of
      extreme temperature days, something agents can anticipate and adapt to …

      Oh my there is indeed global warming that is increasing the average temperature over time as well as temperature volatility. But CoRev wants to pretend all of that away.

      Reply
      1. CoRev

        Barking Bierka – the NYC Jerk, shows his ignorance even again. Climatologist and economists ALL agree. No they do not All agree.

        Did you even read the paper? It isn’t about global warming, but temperature shocks, or heat and cold waves.

        Also I take it you don’t know the difference between weather and climate.

        Reply
    3. AS

      CoRev,
      I think the reason for the temperature variation being “reduced in size in recent times” may be due to the rolling data process used by the author. If I read the section correctly on page 9. The data are updated every year. As the temperatures get more extreme, the variations from the new data which includes increased number of extreme temperatures are less frequent. Again, if am reading the section correctly.

      Our notion of temperature shock is based on the variation over time in the shape of the distribution of local temperatures. P4

      “We start by collecting average temperatures in each county at daily frequency. For each series, we group observations by quarter and compare the within-quarter distribution of temperatures to a reference distribution, which is made by pooling daily observations recorded in the same quarter of the past years. We argue that five years is a sufficiently long period for agents to figure out the shape of the underlying temperature distribution, so we construct the reference distribution based on that time span.9 The reference distribution rolls over time, i.e. it is updated every year for each quarter. In each period, we compute the 10th and 90th percentiles, which are taken as upper and lower thresholds for current temperatures, i.e. the values beyond which actual observations are labeled as very high or low. In order to be perfectly aligned with expectations, we posit that the share of extreme days in current quarter must be the same of that distribution: differently, a larger number of extremes represent a positive surprise, while a lower number makes a negative one.” Page 9

      “Example. Imagine to compute the US-wide temperature shock for q2 (spring) of a generic year (numbers are fictitious). Suppose the US is divided in only two large territories, West (40% population) and East (60%). Assume that, considering spring time in the past 5y, the 10th percentile of the reference temperature distribution for the West – made of 90 days × 5 years – is 40 F, while the 90th percentile is 60 F. In spring this year, West had 8 days with average daily temperature below 40F, and 15 days above 60F. As norm in a single quarter should be 9 days per tail, the temperature surprise for the West is quantified as shockW = (8 − 9) + (15 − 9) = 5 days if surprise in East results, instead, to be 2 days, the US-wide shock is shockUS = 5 × 0.4 + 2 × 0.6 = 3.2 days.” Page 10

      Reply
        1. CoRev

          Menzie, shocks are temperature events in his context.” Based on that notion, pointing to agents’ reaction to a surprising event, we construct a time series of temperature shocks for the United States by isolating the component of temperature variations that cannot be reasonably anticipated.” Page 1.

          “Shocks have been rela-tively small in the last 15 years, suggesting that adjustments in the shape of the temperature distribution have been stronger in the early part of the sample. ” Page 2

          Reply
      1. CoRev

        AS, I think what Filippo is finding is the reality of how temperature is changing. There have been fewer record setting events, when the event is measured at a site with significant history. New/newer sites set records all the time. Most analyses show temperature increasing in night time and near the Arctic region.

        His temperature calculation methodology is similar to how most climatologists calculate temperature trends with differences in base line periods, his 5 Yrs and climatologists usually use 30 Yrs. I was pleased to see a definition for temperature shock in this paper.

        Reply
        1. macroduck

          Nah. You just made that up. The answer is in the post, above. ltr pulled out the quote which you ignored. I’ll repeat it:

          “This does not imply that temperature fluctuations have reduced in size, but simply that extreme temperatures have become more the normality in recent times, so they are somewhat less surprising than in the past.”

          When AS and both gave you straight forward answers to your question, even though everyone here knows you are a shill for your rightwing pay masters, you missed the opportunity to play honest. You just don’t have it in you. It’s almost as if you can’t risk being honest with honest people, for fear you’ll get out of practice beig deceitful.

          By the way, where are those links to evidence that the pattern of natural disasters show climate change is abating?

          Reply
          1. pgl

            You know CoRev gets mad when his cherry picking is exposed. Now he will be barking all night outside your house.

          2. CoRev

            MD, made what up? Fromm the paper: “We build US temperature surprise shocks at quarterly frequency starting from the beginning of the most recent phase of the global warming era (the 1970s), up to the end of 2019.1 Shocks have been rela-tively small in the last 15 years, suggesting that adjustments in the shape of the temperature distribution have been stronger in the early part of the sample. ”

            I high lighted phase to show what most climatologist recognize as recent phases: https://www.woodfortrees.org/plot/hadcrut4gl/from:1940/plot/hadcrut4gl/from:1975/trend/plot/hadcrut4gl/from:1940/to:1974/trend
            These phases are often defined by the ~60 year long Pacific and Atlantic Oscillations of temperature, PDO and AMO. These periods are predictable. If you look at the WFT graph you will note the number of peaks, high and low, if you were to overlay that graph with ENSO events there would be very high correlation. https://ggweather.com/enso/oni.png Generally for every el Nino there will be a ls Nina, but they may not be of equal strength and length.

            The current phase, since the 70s, has been one of stronger and longer el Ninos. We have set temperature records during these el Ninos. The latest was in 2016.

            From your quote: ” so they are somewhat less surprising than in the past.” But the paper is looking at “The macroeconomic effects of temperature surprise shocks. So less surprising and smaller: “Shocks have been rela-tively small in the last 15 years, …”

            I’m not sure to what you are objecting, or what I just made up. I did not necessarily disagree with AS and the paper’s definition. It is after all their methodology and finally defines a temperature shock, which is extreme temperatures.

          3. macroduck

            CoVid,

            You ignored the very next sentence, the one which says you’re lying again.

          4. CoRev

            MD we both have an opinion. Yours is wrong. Look again at figure 5 of the paper

            It looks like the cold events are equally distributed per 1/2 (19/19), and that the hot events are 5 more in the more recent 1/2 (23/28). Extremes for each are diminishing throughout the 45 years. Unless you ideology causes you to misread what is written, again, this confirms what I said at the beginning of this comment: “AS, I think what Filippo is finding is the reality of how temperature is changing.”

            No value judgement just an observation.

    4. macroduck

      The five-year base period means weather is probably the better term to use. This paper looks at diiations from trend, raher than trend:

      “I compute quarterly county-level “surprises” as the difference between the number of very high and low temperature days within the quarter and those observed on average during the same quarter of the past five years.”

      An important addition to our knowledge, not a sweeping review.

      The fact that deviations from the short-term average have lessened does not mean the “Climate Crises are diminishing”. This paper is designed to look at weather as a way of asessing responses to climate change. Looking at it’s results is unlikely to tell you about climate change, because that’s not what it’s designed to do. To extract information about climate change from Natoli’s data, at a minimum base-period temperature ranges need to be examined. If those ranges are narrowing on trend, then you might be on your way to evidence that “Climate Crises are diminishing”. Otherwise, no.

      Got links to papers claiming natural disasters show diminished climate change effects? Love to see ’em, if they exist.

      Reply
      1. macroduck

        Ahem…(raises megaphone)…got links to those papers on natural disasters showing diminished climate change effects?

        Reply
        1. Menzie Chinn Post author

          macroduck: They’re right next to the papers showing hydroxychloriquine cures covid-19. Those are next to the aluminum tubes that demonstrate Iraq’s possession of WMDs.

          Reply
          1. Moses Herzog

            Eh, the dry humor some of us love about this blog.

            I watched the documentary on Vincent Chin tonight (“Say his name!!!”). I feel a lot of emotion watching this documentary and I don’t consider myself emotional person in general. I had so many random thoughts about it. I feel if I list them all this will turn into an extremely long comment, that I could burn 45 minutes here at the keyboard pretty easily. So I want to stick to my big thoughts on the documentary.

            1. The strongest things about it hit me is how Ron Ebens seemingly has zero guilt or zero conscience about what he did. You can look at his eyes and see it doesn’t pahse him at all the crime/sin he committed. Rather he sees himself as “the victim”. What Ebens did was NOT “manslaughter”. What Ron Ebens did was murder. PERIOD–no need for extenuation.

            2. Vincent’s mother. You know when people undergo a trauma, one thing you hear both psychologists and lawyers who help the victims of a seriously traumatic experience~~when a person has a traumatic event everything in life becomes defined as “something that happened before the event” and “those things which happened after the event”, or as if time had stood still ever since the event occurred. I think this is how it is, for Vincent Chin’s Mother.

            3. How come the two Black policeman who seemed genuinely empathetic to Vincent Chin weren’t called in for testimony int eh first trial in Detroit?? That is super strange. If they had taken Ebens’ “side” or had seen the same exact crime occur to a white man, are we to believe those Black policeman wouldn’t have been called in to testify in the first trial?? It’s a horrendously bad decision by judge Kaufman.

            4. I think it was Gary Koivu?? I am glad there was at least one white guy who spoke up for Vincent. When I think of how relations between Asian and whites and how those relations should I will think of Gary Koivu and Vincent Chin. I hope that if Vincent Chin’s mother is still alive, that Gary Koivu visits her in person (unless Mr. Koivu feels his personal presence would do more to hurt her as a “reminder” of what happened). I feel as Vincent’s friend Gary should do that, and I wager that he does if that is the case.

        1. macroduck

          I restated what you said, because what you said was vague. Your effort to hide behind slippery language is your problem, not mine. Here is what your link says:

          “In constant 2017 US dollars, both weather-related and non-weather related catastrophe losses have increased, with a 74% increase in the former and 182% increase in the latter since 1990. However, since 1990 both overall and weather/climate losses have decreased as proportion of global GDP, indicating progress with respect to the SDG indicator.”

          Your claim is that a 74% increase in weather-related damage is a sign that “Climate Crises are diminishing” to use your words (happy?) A 74% increase is not “diminishing”.

          Wanna try again?

          Reply
          1. CoRev

            Restating is an indicator you misunderstood the comment.
            Adding Climate change to the statement is both slippery language and your misunderstanding of the comment.

            As for determining and measuring natural catastrophes it is determined by the metric. The metric in your quote from the paper was “constant 2017 US dollars, and yet you missed this in your own quote: “However, since 1990 both overall and weather/climate losseshave decreased as proportion of global GDP, indicating progress with respect to the SDG indicator.” So the determining metric has decreased.

            The whole point of the article was that the metric was wrong and when adjusted for changing population and locales the actual number decreased. This was confirmed by the 2014 IPCC SREX.

            I’ll repeat that sentence: “However, since 1990 both overall and weather/climate losseshave decreased as proportion of global GDP, indicating progress with respect to the SDG indicator.”, because it has a direct impact on the finding of this paper. If the economic impact of natural disasters is decreasing and the impact “Temperature surprise shocks in the US have been a balanced mix of heat and cold surprises and reduced in size in recent times.” then the findings may be questioned.

          2. Barkley Rosser

            Sorry, CoRev, macroduck has you dead to rights. Yes, we see you imitating Moses by emboldening the statement that these weather disasters are costing a decreasing proportion of global GDP. But you are right that the costs have increases by 74 percent, which is not a decrease, even if it is one of “the metric” that is the percent of global GDP. Pielke may have highlighted that, but that just makes Pielke look completely ridiculous. It makes you look ridiculous as well, nothing new here.

          3. Barkley Rosser

            Oooops, I got switched in that last statement. It is macroduck who is right about the 74% increase, not CoRev, who is the one making himself look completely ridiculous. What is a mystery is why Pielke would put something so silly in an abstract as this claim that somehow this increase in weather costs represents a “decrease in the metric” of a share of global GDP, with the claim that this percent measure is a “sustainability> measure. Pielke and whoever let him publish this garbage should be ashamed of rthemselves. But that CoRev is so stupid he thinks this is impressive is not surprising at all.

        2. pgl

          “The Sustainable Development Goals indicator framework identifies as an indicator of progress the objective of reducing disaster losses as a proportion of global gross domestic product. This short analysis presents data on this indicator from 1990. In constant 2017 US dollars, both weather-related and non-weather related catastrophe losses have increased, with a 74% increase in the former and 182% increase in the latter since 1990. However, since 1990 both overall and weather/climate losses have decreased as proportion of global GDP, indicating progress with respect to the SDG indicator. Extending this trend into the future will require vigilance to exposure, vulnerability and resilience in the face of uncertainty about the future frequency and magnitude of extreme events.”

          Wait – you are opposed to this entire SDG project as you see it as some Commie plot. CoRev the dog still chasing its own tail.

          Reply
  4. ltr

    https://english.news.cn/20220604/172c8c3a854d4cac9a623b16a25bc12f/c.html

    June 4, 2022

    Zero-carbon road traverses China’s largest desert
    By Zhang Yuyang, Gu Yu and Su Chuanyi

    URUMQI — The Tarim Desert Road, which traverses the Taklimakan Desert in northwest China’s Xinjiang Uygur Autonomous Region, has been turned into a zero-carbon one, thanks to a transformation project completed Thursday for the irrigation system along its shelterbelt.

    After the transformation project, shrubs along the road are now irrigated with the help of solar power-fueled pumps, instead of diesel ones.

    The project is estimated to cut diesel consumption by about 1,000 tonnes and carbon dioxide emissions by 3,410 tonnes per year, according to PetroChina’s Tarim oilfield branch, which is in charge of the project.

    THE GREEN SHIFT

    The Tarim Desert Road was completed in 1995. Cutting through China’s largest desert, it reduced the distance from the regional capital Urumqi to Hotan by 500 km.

    However, it was no easy task to build and maintain a road in the Taklimakan, the world’s second-largest shifting-sand desert. In 2005, a 436-km-long shelterbelt was planted on both sides of the road to protect it from being swallowed up by sand, and 109 well stations were built for irrigation.

    Eighty-six of the well stations were powered by diesel fuel. They were also unable to provide continuous energy.

    In January this year, PetroChina’s Tarim oilfield branch launched the transformation project, which sought to alter all the diesel power generators into photovoltaic power-driven ones.

    In addition to the diesel consumption and CO2 emissions reduced with the help of the project, CO2 captured by the shelterbelt can surpass 20,000 tonnes each year. It can help neutralize the CO2 emitted by passing vehicles, thus making it a zero-carbon road, according to the branch.

    The solar power generators are also equipped with energy storage facilities, which ensure a stable power supply and provide the maintenance workers with accessible electricity….

    Reply
    1. ltr

      https://english.news.cn/20220616/e2a12a3d9f4d46f7be92cc16e676032a/c.html

      June 16, 2022

      China inaugurates world’s first desert rail loop in Xinjiang

      URUMQI — With the very first train roaring northeastward from Hotan, northwest China’s Xinjiang Uygur Autonomous Region, the Hotan-Ruoqiang railway was formally put into operation Thursday. It also marks the inauguration of the world’s first desert rail loop line.

      The 2,712-km loop, encircling the Taklimakan, China’s largest desert, and linking major cities including Aksu, Kashgar, Hotan, and Korla along its route, is expected to put the development of Xinjiang, especially its southern part, on a faster track.

      LAST PIECE OF THE PUZZLE

      The Taklimakan Desert rail loop line was completed after the new Hotan-Ruoqiang rail line was linked with the Ruoqiang-Korla section of the Golmud-Korla railway line, and the Korla-Kashgar and Kashgar-Hotan sections of the southern Xinjiang rail line.

      The Hotan-Ruoqiang railroad stretches eastward from Hotan City to Ruoqiang County along the southern edge of the Taklimakan, the world’s second-largest shifting-sand desert, with 65 percent of its length inside the desert. Its construction started in December 2018.

      The newly opened line extends 825 km with a speed of 120 km per hour, and it has 22 stations, with 11 offering passenger service and six offering cargo service. Trains can cover the entire distance in 11 hours and 26 minutes.

      The railway line runs through the southern edge of the Taklimakan Desert, and sandstorms in this region pose a serious threat to the railway. Anti-desertification programs were carried out simultaneously with railway construction, said Wang Jinzhong, Party chief of the construction contractor of the Hotan-Ruoqiang railway.

      Five viaducts with a total length of 49.7 km lift the railroad to protect it against sandstorms. Meanwhile, a total of 50 million square meters of grass grids have been laid and 13 million trees, including rose willow and sea buckthorn, have been planted.

      The green barrier of shrubs and trees not only guarantees the safe passage of the trains but also helps improve the local ecological system, Wang added….

      Reply
  5. ltr

    The first picture reveals that, between 1975 and 2019, surprises have been largest in southern counties; the second one shows that, at the national level, adjustments in the shape of the temperature distribution have been greatest – inducing bigger shocks – in the early part of the sample than in recent times. This does not imply that temperature fluctuations have reduced in size, but simply that extreme temperatures have become more the normality in recent times, so they are somewhat less surprising than in the past.

    [ Picture 1 – a and b ]

    — Filippo Natoli

    [ Really nice essay. ]

    Reply
    1. ltr

      http://www.xinhuanet.com/english/2021-03/21/c_139825433.htm

      March 21, 2021

      China’s central bank makes green finance a priority

      BEIJING — Green finance will be a priority for China’s central bank this year, as well as during the 14th Five-Year Plan period (2021-2025), the country’s central bank governor has said.

      To help achieve China’s emission and carbon neutrality goals, the central bank should encourage the financial system to support green investments with a market-based approach, said the governor of the People’s Bank of China Yi Gang at the China Development Forum.

      Yi also called for evaluating and dealing with the impact of climate change on financial stability and monetary policies promptly….

      Reply
    2. macroduck

      Corev could have found his answer in the paper, as ltr has. Perhaps Corev was unable to find what he did not wish to find.

      Reply
    1. Moses Herzog

      I think I know what you’re talking about:
      https://www.cnbc.com/2019/09/11/trump-says-fed-boneheads-should-cut-interest-rates-to-zero-or-less-us-should-refinance-debt.html

      https://www.politico.com/news/2019/10/30/federal-reserve-interest-trump-061326

      But I wonder why President Biden has been less vocal about what the FOMC should do?? Any postulates on that Bruce?? Are you one of those, similar to Larry Summers who thinks when Democrats are in the White House rates should be held very high and when Republicans are in office rates should be kept low??

      Reply
  6. macroduck

    One particularly troubling bit of information from this research is displayed in figure 1. That big blue blob in the southern states, showing a high incidence of temperature shocks, overlaps the area of likely increase in wet-bulb temperature to levels at which human effort is necessarily diminished. In other words, there is a good chance a large part of the southern U.S. will become a low-productivity hell by 2050. This is currently an area of net in-migration. Forced in-country migration is one of the big economic issues likely to result from climate change. Natoli’s data adds to concern.

    Reply
    1. ltr

      One particularly troubling bit of information from this research is displayed in figure 1. That big blue blob in the southern states, showing a high incidence of temperature shocks, overlaps the area of likely increase in wet-bulb temperature to levels at which human effort is necessarily diminished….

      [ Troublingly important. Research is proceeding on the matter in China, notably in habitat and soil and water generation and protection and agriculture. ]

      Reply
    2. ltr

      https://news.cgtn.com/news/2022-06-19/Chinese-scientists-identify-genes-for-more-heat-tolerant-rice-1aZ3EPUr1de/index.html

      June 19, 2022

      Chinese scientists identify genes for more heat-tolerant rice

      Chinese scientists have found two genes in rice that can make the staple crop more heat-resistant, providing a new way to breed highly thermotolerant crops, according to a study * published in the journal Science.

      The researchers from the Shanghai Institute of Plant Physiology and Ecology under the Chinese Academy of Sciences and Shanghai Jiao Tong University revealed the mechanism by which the rice’s cell membrane senses external heat-stress signals before communicating with chloroplasts – the organelles in which photosynthesis occurs.

      Too much heat can damage a plant’s chloroplasts. When temperatures exceed a crop’s usual tolerance, its yields tend to drop.

      The researchers identified a locus with two genes: Thermo-tolerance 3.1 (TT3.1) and Thermo-tolerance 3.2 (TT3.2). They interact in concert to enhance rice thermotolerance and reduce grain-yield losses caused by heat stress.

      The researchers found that accumulated TT3.2 triggers chloroplast damage regarding heat stress, but, in that scenario, TT3.1 can serve as a remedy.

      Upon heat stress, TT3.1, a potential thermosensor, will remove the cell membrane from the cell to degrade the mature TT3.2 proteins, according to the study.

      “The study elucidates a fresh molecular mechanism that links plant cell membranes with the chloroplast in responding to heating signals,” said the paper’s co-corresponding author Lin Hongxuan with the Shanghai Institute of Plant Physiology and Ecology.

      Then, the researchers used hybridization to translate the TT3 locus of African rice into Asian species.

      The field test has shown that the new species is more heat tolerant. It can withstand heat at 38 degrees Celsius without crop failure, while the output of normal species would be reduced above 35 degrees Celsius, said the researchers.

      The newly-found gene might also be used in other plants, including wheat, maize, bean, and vegetables, to cultivate heat-tolerant strains, according to the researchers.

      * https://www.science.org/doi/pdf/10.1126/science.abo5721?download=true

      Reply
    3. CoRev

      MD, remember this paper is for both warm and cold shocks. What you think is happening is not supported by the science: “…overlaps the area of likely increase in wet-bulb temperature to levels at which human effort is necessarily diminished…. there is a good chance a large part of the southern U.S. will become a low-productivity hell by 2050.”

      https://www.epa.gov/sites/default/files/2021-04/seasonal-temperature_figure2_2021.png A large portion of the south is actually warming slower than the rest of the country.

      Reply
      1. Barkley Rosser

        CoRev,

        Yeah, here you are messing up again about what is a trend and what is a shock. So, trends may be slower in the southern states, but that is completely consistent with the shocks being greater in the southern states. As Menxie has suggested you really need to read the paper carefully and think clearly about it, which you do not seem to be doing.

        Reply
      2. macroduck

        Who told you you are qualified to speak about science, slow boy?

        So, let me help you. Wet-bulb temperature is a combined measure of temperature and humidity. “Wet bulb” is the name because wrapping a wet cloth around the bulb of a thermometer reduces the measured temperature.

        Evaporation is part of the human temperature-regulating system. Evaporation is reduced ith a rise in humidity. (Only for you do I feel the need to explain that.) Humans can function relatively well in high temperatures (near body temperature) in low humidity. Rising wet-bulb temperatures near human body temperature are another matter. At a wet-bulb temperature above 90 degrees fahrenheit (which is seveal degrees below normal human body temperature – again, I explain just for you), even those well adapted to heat have to curtail physical activity. That, slow boy, is science.

        And, as long as I’m cleaning up your mess, here’s more. Average temperatures in the south of the U.S. are higher than in the north. Extreme hihs are higher in the south than the north. So a more gradual rise in (dry-bulb) temperatures in the south is still a problem. Here, I will refrain from mentioning science, since math and a grasp of facts is all that’s needed.

        And for goodness sake, of course the shocks data Natoli has generated include both extreme cold qnd extreme heat! How, pray tell, does that mean climate change “Crises” (with an upper-case “C” for some reason) is diminishing?

        I guess I need to post another warning to innocent by-standers. Please understand, CoRev is only pretending to be in discussion with other commenters here. He is actually trying to cast doubt among you, casual readers of this blog, because he has an agenda. That a that agenda requires deceiving the public about the facts of climate change and the facts of econonics. Regular commenters here all know his tricks and know that he is always, always trying to undermine belief in facts. He has no other goal in his comments here.

        CoRev wants casual readers to doubt the facts, so he casts doubt on them. He knows he isn’t convincing me or AS or Menzie or Moses or any number of other commenters here, but he pretends to try. He pretends, because he wants to sow doubt among those who may be less familiar with climate science and economics. He has an agenda and won’t let truth stand inthe way of that agenda. Feel free to ignore him.

        Reply
        1. CoRev

          MD, gasp! You mean it warmer as we approach the equator???? You mean during extremes climate or weather humans curtail their exposure???? Wow, you grasp of the science is astounding and the casual reader is probably impressed. Knowledgeable readers are laughing however.

          You in this comment thread have emphasized climate change by misstating what I said while also admitting that the fiver year period used in this article’s paper is weather. If the 5 year period weather what are the events within the period? Hint: they are not climate.

          The fact that your list of readers are not convinced is an another indicator of their objectivity. Sad really.

          Reply
          1. macroduck

            Climate is with us every day. Temperature, humidity, wind speed, evaporation and the like all represent climatic conditions. Changes that are measured against a five year average are best described as changes in weather, because we can be absolutely sure they are.

            That does not mean weather events do not represent climate change. It certainly doesn’t mean this bit of grammatically challeneged drivel is true:

            “If the 5 year period weather what are the events within the period? Hint: they are not climate.”

          2. CoRev

            MD, now you’re just getting desperate: “Changes that are measured against a five year average are best described as changes in weather, because we can be absolutely sure they are.

            You object to this statement: “If the 5 year period weather what are the events within the period? Hint: they are not climate.”

            Everything is climate to the climate ideologue, even short term (weather) events. Get your story straight.

          3. Barkley Rosser

            CoRev,

            Effectively the paper is assuming five year averages as reflecting what the “climate” is while deviations from that amount to “weather shocks.” This is not unreasonable. You’re disagreeing with that simply reminds people that you are not a climatologist, although it looks in this thread that you are presenting yourself as one, or more of one than people like Menzie or me.

            You may have forgotten, bozo, I have worked with and coauthored with climatologists for nearly half a century. What are your credentials in this field? That you dug up a paper by Pielke in which he makes himself look like an idiot?

    4. ltr

      One particularly troubling bit of information from this research is displayed in figure 1. That big blue blob in the southern states, showing a high incidence of temperature shocks, overlaps the area of likely increase in wet-bulb temperature to levels at which human effort is necessarily diminished….

      [ Again, this is important and driving a necessarily considerable amount of research. I am grateful for the comment. ]

      Reply
  7. Barkley Rosser

    A general observation on climate change and GDP, which one can find in the IPCC report, is that for some locations rising average temperature will probably lead to rising GDP, at least for awhile, with it leading to lower GDP immediately elsewhere. Unsurprisingly, the places where the former holds are nations further north that are colder while the latter are nearer the equator and hotter.

    As it turns out, the boundary between these projected outcomes cuts right across the US, with northern parts in the increase category and southern parts in the decrease category. This is ironic given that politically northern states tend to support fighting global warming while the southern states tend to oppose it, both of these groups arguably working against their own economic interests.

    I note that what I am posting here is about changes in average temperatures and thus not immediately relevant to this matter of what happens in connection with unexpected temperature “shocks,” although the fact that there seem to be a lot more shocks in southern states where global warming is projected to damage GDP makes the papetr’s findings consistent with the IPCC projection, as far as it goes.

    Reply
    1. CoRev

      Barkley, global warming is not a temperature shock. One is an average the other an event.

      You’ve been wrong a lot lately.

      Reply
      1. Menzie Chinn Post author

        CoRev: Well, duh, yes. That’s exactly what Barkley Rosser is stating in his comment.

        In general, “shocks” are the unforecasted or unforecastable component of some variable, not the change.

        Man, you are dense. Please read the paper.

        Reply
        1. macroduck

          Dense or dishonest? Really, he has misconstrued more in comments to this post than I believe is possible for your average dumb person. Now, that in no way means CoRev is particularly intelligent, just that a lack of intelligence seems a poor explanation for his behavior. It takes effort and intend to misconstrue everything in sight, all in the same way. Every miscontrual (misconstruction?) is aimed at casting doubt on a fact he finds inconvenient (temperature swings are not getting smaller), or on the understanding of people who understand perfectly well ( the difference between weather and climate).

          CoRev’s behavior is the “fake science” playbook in a nutshell.

          Reply
          1. Moses Herzog

            We have heard the term “regulatory capture” which is apt in certain situations. What do we call CoRevs’ problem?? Cable TV capture of the brain”?? Conservative AM radio capture of the brain?? I sometimes think he is similar to “Econned”, and a few others we have here. I’ve forgotten some of the acronyms. But some view the blog as “liberal” and so they don’t even care what side of the argument they take. So long as they get the chance to argue they feel they are doing good. Like in the old days of the colonization of America by Europeans. They don’t care to stop and ask which Native Americans are peaceful and which Native Americans are warlike. So long as they are “taking up arms” against “the enemy”, it’s their version of “virtue signaling”. Any cause of fighting and pestering is a “win” for them. That’s why you see folks like “Econned” contradicting their own statements inside of their last 2-3 comments. They have no real ideology. They aren’t smart enough to have an ideology. They only know in their head “I’m doing it!! I’m doing it!!! I’m fighting the bad people!!!! I am a soldier now!!!!”

        2. CoRev

          Menzie, I realize you are not a climatologist, but word shave meaning. Barkley used these word: ” rising average temperature will probably lead to rising GDP, ” These words do not mean shocks in the climate community. Averages do not mean or define shocks. You are not innumerate so I know you understand that. Filippo’s approach is to define temperature anomalies, similar to so many climatologist do.

          I read the paper, unlike so many here, and was pleased to finally find the definition of a temperature shock. Your last foray into this subject did not, nor did/could any of the commenters, including yourself.

          Trying to combine two specialties ends up in Barkley’s and your misunderstanding of the terminology issues. Adding that this paper is probably not peer reviewed or probably not peer reviewed by climatologists, it has its own terms’ confusion.

          Man, you are dense.

          Reply
        3. CoRev

          Menzie, since this paper and you believe that temperatures impact US GDP, do we have an estimate of amount?

          I ask because I believe the climate change mitigation policies have been largely responsible for today’s inflation. Meddling with the availability of fossil fuels, so fundamental to supporting the economy, is impacting its performance. How much of the ~$1.76T cost of 8.6% US inflation is attributable to these policies?

          How much is inflation’s largely (my term) impact? How much is the impact of temperature shocks? Is mitigation worse than temperature shock’s cost? Barkley seems unsure: ” is that for some locations rising average temperature will probably lead to rising GDP, at least for awhile, with it leading to lower GDP immediately elsewhere. ”

          What’s your opinion?

          Reply
          1. Barkley Rosser

            CoRev,

            Menzie may not be a climatologist, but he does know statistical modeling, and you are most definitely not a climatologist. On what grounds are putting yourself forward here as one? You have managed to make one stupid comment after another on the matter. Have you published on climatology? I have. You are just making a giant fool of yourself with all this, and, again, not for the first time.

            And now we have your absurd claim that “climate change mitigation policies” are the reason for our current inflation. Oh, are these responsible for the fact that 30 million tons of grain are sitting in ports in UKraine that are driving up world food prices? Oh, V.V. Putin’s invasion of Ukraine and blockading of Ukrainian ports is an example of “climate mitigation policies”? Gosh, I thought he was de-Nazifying Ukraine. Oh, and then we have China locking down Shanghai and Beijing due to Covid-19 thereby further snarking global supply chain problems. But, hey, yet more “climate mitigation policies”!

  8. rsm

    Why does this passage from an article in today’s zerohedge make me think of Chintzy, lccp and the whole gang?

    “As academics – they cannot possibly measure the risk in what they are doing. They are focused on backward-looking economic data – NOT the thousands of NEW risk metrics flying out of the crypt.”

    Reply
      1. Moses Herzog

        Sounds like a Barkley Junior problem. See you can’t move the goal posts (i.e. make shit up) when your own words are nearly bipolar opposite what you said 2 weeks before (sometimes 2 hours before) and you can’t make up stuff your opponent said if you are asked to show where they said it, so you try to convince people on a blog you suffer from “intermittent ataxia” and then just rain down crap in all your comments. He’s the pride of JMU.

        Reply
        1. Barkley Rosser

          Moses,

          Oh, some new lies out of you about me? Go eff yourself. The goal post movers here are Econned and CoRev, not me.

          Are you bothered by the fact that I changed my mind when new information comes in? Yeah, for months I was discussing the serious probabilities that the Russian troops in Belarus might invade Ukraine. Then shortly before their exercises were over Putin announced publicly that they were going to go back to Russia, an announcement that was believed by most of the soldiers themselves, their mothers, President Zelenskyy of Ukraine, and me. So I changed my mind based on new information a few days later. That is not “moving goal posts.” A few days later Belarusan President Lukashenka declared that the troops needed to stay to protect Belarus from a possible Ukrainian invasion, a complete farce, this was new information that made it clear that Putin had been lying and that the Russian troops would not be going home, which they did not. At that point, after making sarcastic remarks about Lukashenka’s comments here that you recently reposted here as being non-sarcastic remarks, you silly moron, and then I changed my view back to what it had been before that there was some probability the troops might be part of an invasion of Ukraine. Responding to new information is not “moving goal posts.”

          Stop lying about me, you total scumbag.

          Actually, I have a bottom line question for you, Moses, one that is serious enough for me to suggest that maybe Menzie should throw your worthless behind out of here. You accuse me of “make shit up.” I have made inaccurate statements here, but I have never made anything up. If you cannot provide an example of me making something up, you seriously need to apologize for this more outrageous lie and retract it.

          Reply
  9. AS

    The linked article seems to help in the confusion of distinguishing climate change from climate shocks.
    “Climate change refers to both changes in average weather conditions (the climate) and the variance of weather patterns… and climate shocks include droughts, floods and storms within their scope.”
    https://iopscience.iop.org/article/10.1088/1748-9326/abb156#:~:text=Climate%20change%20refers%20to%20both,and%20storms%20within%20their%20scope.

    If I understand correctly, climate shocks occur randomly within the pattern of climate change. This being the case, I assume that climate shocks have a unit root.

    Reply
    1. Moses Herzog

      There was a piece of polar ice that broke off relatively recently that was half the size of Manhattan. I wonder if that counts as a “shock” or not?? The two events I am linking to here are separate incidents, but both noteworthy in my personal opinion:

      https://www.cbc.ca/news/science/greenland-glacier-calving-1.4742691

      https://www.pbs.org/newshour/science/east-antarctica-ice-shelf-the-size-of-new-york-city-collapses-accelerated-melt

      Again, if you’re talking to stupid people, you know the ones wearing red hats saying “Make America Backwards Again”, there’s no easier way to explain to a dumb person global warming than to show them the shrinking of the polar ice caps. It’s also a very quick litmus test to see if they will believe any fact at all.

      Reply
    2. CoRev

      This paper might help on the specific unit root issue: moya.bus.miami.edu/~dkelly/papers/unit.pdf (not a link) search under this title: Unit Roots in climate: Is the Recent Warming Due to Persistent Shocks?
      ” Thus, the above results do not show that there is in fact a unit root in temperature (i.e. that shocks to the climate persist forever), but merely that statistical inference from the data set is difficult because the climate may be subject to shocks which are long in duration relative to the size of the data set (which clearly fits with the idea that long run trends such as ice ages persist for much longer than the 140 year modern data set).
      and concludes with
      Second, we cannot reject a unit root in the climate. Hence, there is a possibility that shocks to the climate persist for a very long time.”

      This is typical of many papers on the subject with appeals for added funding: “An avenue for future research is to test for unit roots in longer data sets based on climate sensitive phenomena.”

      This paper attempts to make the case: “In recent years, scientists have become increasingly certain that the rise in global mean temperature is due in part to rising concentrations of greenhouse gasses (GHGs).” I wasn’t interested in their hypothesis only the attempt to define whether unit root existed.

      Bottom line from this paper maybe.

      I personally believe ENSO and Ocean Oscillations have a greater short term (30-60 Years) effect on temps than GHGs. That’s not to say GHGs have NO EFFECT, but that their effect is exaggerated.

      Reply
      1. Menzie Chinn Post author

        CoRev: You’re citing a 22 year old (unpublished) paper on unit roots. Some papers don’t get published because (1) the author runs out of steam, or (2) the findings are unremarkable. I don’t know in this case, but I can say that even back in 2000, I would’ve used more powerful unit root tests.

        Reply
        1. CoRev

          Menzie, isn’t this article based upon a new (unpublished) paper? I haven’t commented on the contents of this paper mostly on the terminology used.

          There are few who would say that weather events DON’T affect the economy. Yes, some of them are temperature related, Texas’ recent history comes to mind. The question is how much and for how long? If we knew that then a mitigation cost and benefits discussion could be had.

          Reply
          1. Menzie Chinn Post author

            CoRev: Yes, but there’s a difference between a paper that was first circulated a month ago and is not yet published, and one that was circulated two decades ago and not published. Usually, we can cite a paper that is more recent which sheds greater light on the subject.

            There are exceptions I can think of where a paper is cited extensively and appropriately as useful for two decades, and *then* published. But they are (very) rare, e.g., the paper documenting the Hodrick-Prescott filter. (But then, Jim H. has a paper on that topic, which was then published…)

          2. CoRev

            Menzie, why did you ignore this question: “There are few who would say that weather events DON’T affect the economy. Yes, some of them are temperature related, Texas’ recent history comes to mind. The question is how much and for how long? If we knew that then a mitigation cost and benefits discussion could be had.”?

            BTW, do you really think that temp shocks are random?

            To be clear that’s two more questions you have ignored.

    3. CoRev

      AS I think you are wrong on: “If I understand correctly, climate shocks occur randomly within the pattern of climate change.” To do so would require rejecting seasonality and serial correlation as perhaps driving factors for climate shocks. I also think you are misusing the term climate when you mean weather, but that’s common when every major weather event is touted as caused by climate change.

      Reply
    4. Barkley Rosser

      AS,

      In principle, yes. But the problem is that there are almost certainly imperfections in the measure of climate change, which is not a neat process, as well as there not necessarily being Gaussian patterns of the shocks, even if the process of climate change is measured accurately. So, in reality one may not well find a nice unit root on those estimated shocks. Things are too messay.

      Reply
      1. AS

        Barkley,
        Thank you.
        It just seemed that if the shocks were random and unpredictable, there would be a unit root. I should have kept quiet on unit roots.

        Reply
        1. Barkley Rosser

          Well, CoRev has managed to pop up on the issue and yet again made a total fool of himself, as Menzie has caught him out on. A curious thing that economics and climatology have in common are that there lots of people who are not experts in either of these but somehow decide that they are and can make authoritative comments on the subjects, even to people who do know about them. CoRev is a curious example of this.

          Reply
  10. CoRev

    An alternative view: https://johnhcochrane.blogspot.com/2021/07/how-much-does-climate-change-actually.html
    How much does climate change actually affect GDP? Part I: An illogical question.
    An illogical question
    The economic effects of climate change are dwarfed by growth. …
    A logical conundrum
    We have fallen victims to an amazing lapse of basic logic. We ask “what is the economic effect of climate change?” We then discount damages assess costs, and discuss cost benefit analysis of carbon policies.

    (Well, “we” economists do. Public policy on this issue has left cost-benefit analysis in the rear-view mirror. Defunding fossil fuels, canceling Keystone but not Nord 3, building electric-car charging stations across North Dakota..is anyone doing any cost-benefit analysis?…

    An answer in search of a question

    It’s really not about GDP is it? Suppose when we end this investigation, we find that there are no economic costs at all to climate change. Sure, the planet gets several degrees warmer, ice sheets melt, seas rise, costs of adaptation must be borne, but when you add it all up the overall effect on GDP is zero. Or (gasp) suppose warming is actually beneficial to GDP. Would that end the urgent desire of those who want to do climate policy to do so? I don’t think it would have much effect at all. Already pro-climate arguments mistake costs and benefits with three and four zeros in the wrong place. …

    Reply
    1. Barkley Rosser

      CoRev,

      You are clearly just going completely off the deep end. You have been posing yourself as a climatologist, which your half-baked claimed experience with the Apollo program does not make you. And now you are identifying yourself as part of a “we” economists. You are neither a climatologist nor an economist, as your increasingluy wacko remarks indicate.

      So you quoted a paper by Pielke that argues that while the cost of weather disasters are rising they are declining as a share of world GDP. Is this the basis of your claims? I note Pielke is a climatologist, not an economist, so not an expert on this. It is clear from the IPCC that large portions of the planet are already experiencing economic losses due to global warming, and as the temperature continues to rise, more and more portions of the planet will join them in experiencing such costs.Your caim that “when you add it all ups the overall effect on GDP is zero” is just plain wrong, and your paper by Pielke even shows that, even if it claims the rising costs from warming are a decliining portion of global GDP. That is NOT zero.

      You are just completely losing it, especially with your apparent fantasies that you are both a climatologist and an economist. You are clearly neither.

      Reply
      1. CoRev

        Barkley, did you note the URL in the comment? The remainder were quotes from that article. Had you bothered to read that article its source would have been easily identified.

        What a lazy hypocrite. You’ve been really wrong a lot lately.

        Reply
  11. AS

    Barkley,
    Thank you.
    It just seemed that if the shocks were random and unpredictable, there would be a unit root. I should have kept quiet on unit roots.

    Reply
  12. rjs

    the odds that i’ll get to see runaway global warming in my lifetime are improving every day:

    Dutch join Germany, Austria, in reverting to coal –

    The Dutch joined Germany and Austria in reverting to coal power on Monday following an energy crisis provoked by Russia’s invasion of Ukraine.

    The Netherlands said it would lift all restrictions on power stations fired by the fossil fuel, which were previously limited to just over a third of output.

    Berlin and Vienna made similar announcements on Sunday as Moscow, facing biting sanctions over Ukraine, cuts gas supplies to energy-starved Europe.

    “The cabinet has decided to immediately withdraw the restriction on production for coal-fired power stations from 2002 to 2024,” Dutch climate and energy minister Rob Jetten told journalists in The Hague.

    The Dutch minister said his country had “prepared this decision with our European colleagues over the past few days”.

    Reply
    1. CoRev

      RJS, the list of countries withdrawing coal restrictions is growing. We can add Australia, Poland, India, China etc.

      This Bjorn Lomborg article has an interesting estimate: https://nypost.com/2022/06/19/fossil-fuel-price-spikes-are-causing-pain-but-little-climate-payoff/
      “McKinsey (https://www.mckinsey.com/business-functions/sustainability/our-insights/the-economic-transformation-what-would-change-in-the-net-zero-transition)
      “Energy costs increased 26% across industrialized economies last year and will rise globally by another 50% this year. While Western governments are blaming Russia’s war on Ukraine, prices were already rising because of climate policies designed to choke fossil-fuel investment. …
      The climate-policy approach of trying to push consumers and businesses away from fossil fuels with price spikes is causing pain with little climate payoff, for two reasons….
      Second, even in the rich parts of the world it is clear few people are willing to pay the phenomenal price of achieving net-zero carbon emissions….
      “McKinsey estimates (https://www.mckinsey.com/business-functions/sustainability/our-insights/the-economic-transformation-what-would-change-in-the-net-zero-transition) getting to zero carbon will cost Europe 5.3% of its GDP in low-emission assets every year — for Germany, more than $200 billion annually. That’s more than Germany spends annually on education and police, courts and prisons combined.”

      It is for these examples I ask for the successful Biden policies, since the unsuccessful are fully recognized. Recognized especially by US voters.

      Reply
  13. AS

    Barkley,
    perhaps you or Professor Chinn can enlighten me on some confusion about the definition of “shocks” related to the comment that shocks are not “forecastable.”
    I understand that droughts and floods may not be forecastable and thus be defined as shocks but is it possible to forecast deviations beyond one standard deviation, and could the deviation beyond one standard deviation be defined as a “shock”?
    While I am more than rusty on Chebyshev’s Theorem, I ask whether his theorem could be useful on forecasting shocks (especially if the distribution is not known)?

    My question relates to comments made by you and Professor Chinn. My question is not an attempt to be argumentative, but to better understand the nature of “shocks”.

    “Effectively the paper is assuming five year averages as reflecting what the “climate” is while deviations from that amount to “weather shocks.” This is not unreasonable.” Barkley

    “In general, “shocks” are the unforecasted or unforecastable component of some variable, not the change.” Professor Chinn.

    Reply
    1. CoRev

      AS, let me try. I do not believe that temperature shocks are unforecastable, since these are weather events which are forecast daily. The lead time of the event forecast, however, is usually just days. What is difficult is to forecast the magnitude of the event. As the paper says: “. In each period, we compute the 10th and 90th percentiles, which are taken as upper and lower thresholds for current temperatures, i.e. the values beyond which actual observations are labeled as very high or low.” Accordingly the forecast of needed conditions is done daily all the time. Forecasting the specific 10th and 90th percentiles would have a low level of confidence.

      I believe much of the temperatures changes are driven due to ocean temperature changes with many of the temperature shocks due to ENSO. Both ENSO and ocean temps are capable of long range forecasts, but again the magnitude of the temps peaks not so much. Oceans: https://www.climate.gov/news-features/featured-images/today%E2%80%99s-seasonal-climate-models-can-predict-ocean-heat-waves-months and ENSO: https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.shtml

      I also think the forecastability confusion lies with subject matter experts (economics) dealing with other disciplines (weather).

      Reply
  14. Barkley Rosser

    CoRev,

    In your massive campaign of moving goal posts on this thread while you spout totally false nonsense such as that there are no effects on GDP of climate change, you have come full circle. You were the one who started out this thread whining that people were confusing weather and climate, and now you are dragging very short term weather forecasting into a discussion of longer term climate modeling. Really, what a total hypocrite you are.

    AS,

    Well, that is basically it: what is not forecasted by one’s model, whether we are talking very short term weather forecasting or longer term climate modeling, which is what the paper is about, are the unforecasted exogenous shocks. One can argue about whether they should be forecastible or not, but I would note that a fundamental reason weather forecasting only works over several days time horizons is that the weather/climate system is fundamentallyi chaotic, that is, subject to the butterfly effect or sensitive dependence on initial conditions, something in fact first identified by the climatologist Edward Lorenz back in 1963, and it was from climatologists that I first learned about chaos theory almost a half century ago, back before it started being called that in 1975.

    As it is, the climate system is both “complicated” and “complex,” a distinction we complexity theorists make. The former in effect says it has lots of moving parts and interactions that are hard to keep track of. And that is true for sure and a major reason why our climate models are so shaky. But they also reflect the complexity arising from nonlinear dynamics that include such things as these chaos theory effects. Remember that when Lorenz posed the butterfly effect, he stated it as that of “a butterfly flapping its wings in Brazil can set off a hurricane in Texas.”

    Reply
    1. CoRev

      Barkley, you spout totally false nonsense. Show us all where I made this claim: “such as that there are no effects on GDP of climate change, ” Doing a search it appears only in this and your comment. Your also made this claim: “when you add it all ups the overall effect on GDP is zero” in quotes no less, but it is no where in the comments. Why the need to lie?

      Also you confirm you do not understand this paper: “a discussion of longer term climate modeling”. The opening sentence of the paper: ” The question of how climate change affects the economy through temperature fluctuations is high on the economic research agenda, as the identification of exogenous weather shocks is still an open issue.” This paper takes a historical look at temperatures to identify shocks.

      Reply
      1. Barkley Rosser

        CoRev,

        No I don’t lie. You do.

        What I quoted appears in the final paragraph of your post here on June 21 at 10:28 AM. Stop lying.

        Your desperation on this thread is really becoming pathetic. You have moved the goal posts so many times, I think you have finally misplaced them, CoRev. And yet again, you pose as the person whose expertise is greater than that of anybody else here, even as you fall so flat on your face you are disappearing into a swamp of misinformation.

        Yet again, I have published in multiple disciplines on this stuff over a long period of time. Have you? I think you might have more luck impressing us if you go back to trying to brag about how many and which medals you got for your work on the US space program, something we never could get a clear answer on, not to mention which ones, if any, you had on walls in your house for your kids to admire. That was so impressive, clearly proving you are a better economist and climatologist than anybody here.

        Reply
        1. CoRev

          Barkley, i can see how some one of your stature would be confused over a comment that starts with: “An alternative view: https://johnhcochrane.blogspot.com/2021/07/how-much-does-climate-change-actually.html then text. You obviosuly failed to go to that ole URL to note that the text was quoted from that ole URL’s article.

          The 2nd claimed quote is not referenced in you comment because you lied about it.

          You also failed to address your obvious misunderstanding: “Also you confirm you do not understand this paper: “a discussion of longer term climate modeling”.”

          Keeping count of your goal posts is difficult, as you move them, so frequently when challenged, but in this last round you are 3 for 3. Claiming others are moving goal posts is a frequent approach you use to deflect from your own failures. Or its perhaps another indication of your misunderstanding.

          You’ve been making a lot of egregious mistakes lately.

          Reply
          1. Barkley Rosser

            CoRev,

            This is my absolutely last comment on this thread, as you have gone completely out of control in moving goal post after goal post as I described in detail on another thread but will not repeat here. It really is quite hilarious, however, that completely ridiculed, in the end YOU fall back on accusing others, me especially, of moving goal posts. No, you are our ALL TIME CHAMPiON at that, making such people as Econned and Moses Herzog look like complete third rate losers in this category by comparison with you.

Leave a Reply

Your email address will not be published.